McGrath, the only listed Australian real estate agency, partly blamed fewer homes available to sell for its profit slump. Data from research firm CoreLogic just shows how dire the problem is for real estate agents.
There were 45,787 newly advertised properties across the country in the past month, 5% lower than a year ago and across the combined capital cities the 28,661 newly advertised properties was 4.1% lower, CoreLogic said. Total properties for sale across the nation was 9.3% lower.
While house prices have had a gravity defying run, for sale properties are starting to drop off amid multiple concerns including unaffordability, fears of a slowdown after banks raised interest rates and regulatory warning on high household indebtedness. McGrath, which saw its own listing drop by a fifth in six months ended December 31, expects the “challenging market conditions” to continue.
The following tables from CoreLogic put the challenges in perspective:
Sydney and Melbourne, which are witnessing the best price growth in the country, saw new listings drop by 3.2% and 4% respectively.
McGrath’s half yearly earnings dropped 72% to $2.4 million in the first half, it said.
That is impacting not just real estate agents. Domain Group, Australia’s second-biggest property listings website, posted a 13% fall in operating profit in the first half partly due to a drop in listings.
The lack of supply is having an impact on selling time and powering house price growth. Homes in Sydney and Melbourne get sold in about a month of hitting the market, CoreLogic said earlier this month.
The average time to sell a property in Australia was just 38 days in December, down from 50 days just five months earlier, it said.